Vanguard hit by rejection of drug

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The Independent Online
INVESTORS in Vanguard Medica, the biotech group, were left nursing a big headache yesterday after its shares plunged on news that SmithKline Beecham had ditched its key migraine product. Almost pounds 50m was wiped off the market value of the group as its shares tumbled 27 per cent to 432.5p.

SmithKline Beecham has decided not to market frovatriptan, Vanguard's anti-migraine compound. It marks a dramatic U-turn for the pharmaceuticals giant which only a few weeks ago included the treatment in an update on its research and development programme.

Vanguard insisted yesterday that it was confident of attracting a new partner to develop the migraine drug and third parties had already expressed an interest. Its argument was borne out by SmithKline which claimed that there was nothing wrong with the compound but that it had decided to concentrate its marketing effort elsewhere.

But analysts expressed surprise at SmithKline's change of heart, and suggested that the setback raised a question mark about the quality of the drug.

Vanguard admitted that flovatriptan was its key product and that its short term prospects depend on the treatment getting to market. The migraine market is currently worth $1.6bn a year and analysts believe Vanguard's treatment could achieve sales of several hundred million pounds a year. Flovatriptan is progressing through Phase III clinical trials and is due to be launched next year, although it will face tough competition from the plethora of existing migraine treatments.

SmithKline said that it did not have enough resources to bring all its drugs to the market, which analysts pointed out was a remarkable admission given the size of the company.

SmithKline will instead concentrate on other projects such as Avandia, a new diabetes treatment and Idoxifene, an osteoporosis drug It is also developing other migraine treatment but denied this was behind the decision to drop flovatriptan. Only last month, SmithKline had highlighted frovatriptan in its annual report as "showing particular promise" and stressed its potential to analysts at meetings in New York and London.